Integrated Electrical Services Reports Fiscal 2013 First Quarter Results
Integrated Electrical Services Reports Fiscal 2013 First Quarter Results
Feb 14, 2013 at 4:10 PM EST
FIRST QUARTER OF FISCAL 2013 AS COMPARED TO FIRST QUARTER OF FISCAL 2012
-
Net income from continuing operations of
$0.6 million , or$0.04 per share, which includes a non-cash$0.12 per share expense related to a reserve for a receivable due from a former surety; adjusted net income from continuing operations of$2.9 million , or$0.19 per share -
Revenue of
$127.3 million , an increase of 16.8% -
Gross profit of
$18.0 million , an improvement of$4.8 million ; Gross margins for the quarter improved to 14.1% of revenue as compared to a gross margin of 12.1% of revenue for the first quarter of 2012 -
Adjusted EBITDA (earnings before interest, taxes, depreciation and
amortization and other items; see reconciliation statement below) of
$4.1 million , an improvement of$2.7 million -
Backlog was approximately
$216 million atDecember 31, 2012 , a$19 million decrease fromSeptember 30, 2012 and an$11 million increase fromDecember 31, 2011
We believe that we are well-positioned for the balance of 2013 and beyond due to our sizable backlog, emphasis on profitable growth and continued expansion in our end markets."
Reserve Related to Receivable from Former Surety
During the three months ended
NON-GAAP FINANCIAL MEASURES AND OTHER ADJUSTMENTS
This press release includes certain financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. ("GAAP"). Management believes that these measures provide useful information to our investors by reflecting additional ways to view aspects of the Company's operations that, when reconciled to the corresponding GAAP measures, help our investors to better identify underlying trends in our business and facilitate easier comparisons of our financial performance with prior and future periods and to our peers. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information calculated in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures presented above to GAAP results has been provided in the financial tables included in this press release.
For further details on the Company's financial results, please refer to
the Company's annual report on Form 10-K for the fiscal year ended
ABOUT
Certain statements in this release, including statements regarding
the restructuring plan and total estimated charges and cost reductions
associated with this plan, are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of
the Securities Exchange Act of 1934, all of which are based upon various
estimates and assumptions that the Company believes to be reasonable as
of the date hereof. In some cases, you can identify forward-looking
statements by terminology such as "may," "will," "could," "should,"
"expect," "plan," "project," "intend," "anticipate," "believe," "seek,"
"estimate," "predict," "potential," "pursue," "target," "continue," the
negative of such terms or other comparable terminology. These
statements involve risks and uncertainties that could cause the
Company's actual future outcomes to differ materially from those set
forth in such statements. Such risks and uncertainties include, but are
not limited to, fluctuations in operating activity due to downturns in
levels of construction, seasonality and differing regional economic
conditions; competition in our respective industries, both from third
parties and former employees, which could result in the loss of one or
more customers or lead to lower margins on new projects; a general
reduction in the demand for our services; a change in the mix of our
customers, contracts and business; our ability to successfully manage
projects; possibility of errors when estimating revenue and progress to
date on percentage-of-completion contracts; inaccurate estimates used
when entering into fixed-priced contracts; challenges integrating new
businesses into the Company or new types of work or new processes into
our divisions; the cost and availability of qualified labor; accidents
resulting from the physical hazards associated with our work and the
potential for accidents; success in transferring, renewing and obtaining
electrical and construction licenses; our ability to pass along
increases in the cost of commodities used in our business, in
particular, copper, aluminum, steel, fuel and certain plastics;
potential supply chain disruptions due to credit or liquidity problems
faced by our suppliers; loss of key personnel and effective transition
of new management; warranty losses, damages or other latent defect
claims in excess of our existing reserves and accruals; warranty losses
or other unexpected liabilities stemming from former divisions which we
have sold or closed; growth in latent defect litigation in states where
we provide residential electrical work for home builders not otherwise
covered by insurance; limitations on the availability of sufficient
credit or cash flow to fund our working capital needs; difficulty in
fulfilling the covenant terms of our credit facilities; increased cost
of surety bonds affecting margins on work and the potential for our
surety providers to refuse bonding or require additional collateral at
their discretion; increases in bad debt expense and days sales
outstanding due to liquidity problems faced by our customers; changes in
the assumptions made regarding future events used to value our stock
options and performance-based stock awards; the recognition of potential
goodwill, long-lived assets and other investment impairments;
uncertainties inherent in estimating future operating results, including
revenues, operating income or cash flow; disagreements with taxing
authorities with regard to tax positions we have adopted; the
recognition of tax benefits related to uncertain tax positions;
complications associated with the incorporation of new accounting,
control and operating procedures; the financial impact of new or
proposed accounting regulations; the ability of our controlling
shareholder to take action not aligned with other shareholders; the
possibility that certain tax benefits of our net operating losses may be
restricted or reduced in a change in ownership; credit and capital
market conditions, including changes in interest rates that affect the
cost of construction financing and mortgages, and the inability for some
of our customers to retain sufficient financing which could lead to
project delays or cancellations; the sale or disposition of the shares
of our common stock held by our majority shareholder, which, under
certain circumstances, would trigger change of control provisions in
contracts such as employment agreements and financing and surety
arrangements; and additional closures or sales of facilities could
result in significant future charges and a significant disruption of our
operations. You should understand that the foregoing, as well as other
risk factors discussed in this document and in the Company's annual
report on Form 10-K for the year ended
Forward-looking statements are provided in this press release pursuant to the safe harbor established under the private Securities Litigation Reform Act of 1995 and should be evaluated in the context of the estimates, assumptions, uncertainties, and risks described herein.
General information about
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|||||||
| CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||
| (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) | |||||||
| (UNAUDITED) | |||||||
|
Three Months Ended |
|||||||
| 2012 | 2011 | ||||||
| Revenues | $ | 127.3 | $ | 109.0 | |||
| Cost of services | 109.3 | 95.8 | |||||
| Gross profit | 18.0 | 13.2 | |||||
| Selling, general and administrative expenses | 14.9 | 12.7 | |||||
| Gain on asset sales | (0.0 | ) | (0.1 | ) | |||
| Income (loss) from operations | 3.1 | 0.7 | |||||
| Interest expense, net | 0.6 | 0.5 | |||||
| Other expense (income), net | 1.7 | (0.0 | ) | ||||
| Provision (benefit) for income taxes | 0.1 | (0.0 | ) | ||||
| Net income (loss) from continuing operations | 0.6 | 0.2 | |||||
| Net income (loss) from discontinued operations | (0.1 | ) | (3.9 | ) | |||
| Net income (loss) | $ | 0.5 | $ | (3.7 | ) | ||
| (Loss) per share: | |||||||
| Continuing operations | $ | 0.04 | $ | 0.01 | |||
| Discontinued operations | $ | (0.01 | ) | $ | (0.27 | ) | |
| Basic | $ | 0.03 | $ | (0.26 | ) | ||
| Diluted loss per share: | |||||||
| Continuing operations | $ | 0.04 | $ | 0.01 | |||
| Discontinued operations | $ | (0.01 | ) | $ | (0.27 | ) | |
| Diluted | $ | 0.03 | $ | (0.26 | ) | ||
| Shares used in the computation of income (loss) per share: | |||||||
| Basic (in thousands) | 14,802 | 14,569 | |||||
| Diluted (in thousands) | 14,919 | 14,569 | |||||
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| NON-GAAP RECONCILIATION OF ADJUSTED EBITDA | |||||||
| (DOLLARS IN MILLIONS) | |||||||
| (UNAUDITED) | |||||||
| Three Months Ended December 31, | |||||||
| 2012 | 2011 | ||||||
| Net income (loss) from continuing operations | $ | 0.6 | $ | 0.2 | |||
| Interest expense, net | 0.6 | 0.5 | |||||
| Provision (benefit) for income taxes | 0.1 | (0.0 | ) | ||||
| Depreciation and amortization | 0.5 | 0.5 | |||||
| EBITDA | 1.9 | 1.2 | |||||
| Non-cash equity compensation expense | 0.5 | 0.1 | |||||
| Reserve related to receivable from former surety | 1.7 | - | |||||
| Adjusted EBITDA | $ | 4.1 | $ | 1.4 | |||
|
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| NON-GAAP RECONCILIATION OF ADJUSTED NET INCOME (LOSS) | ||||||
| (DOLLARS IN MILLIONS) | ||||||
| (UNAUDITED) | ||||||
|
Three Months Ended |
||||||
| 2012 | 2011 | |||||
| Net income (loss) from continuing operations | $ | 0.6 | $ | 0.2 | ||
| Non-cash equity compensation expense | 0.5 | 0.1 | ||||
| Reserve related to receivable from former surety | 1.7 | - | ||||
| Adjusted net income (loss) | $ | 2.9 | $ | 0.3 | ||
| Adjusted income (loss) per share: | ||||||
| Basic | $ | 0.19 | $ | 0.02 | ||
| Diluted | $ | 0.19 | $ | 0.02 | ||
| Shares used in the computation of income (loss) per share: | ||||||
| Basic (in thousands) | 14,802 | 14,569 | ||||
| Diluted (in thousands) | 14,919 | 14,569 | ||||
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| SELECTED BALANCE SHEET AND CASH FLOW INFORMATION | |||||||
| (DOLLARS IN MILLIONS) | |||||||
| (UNAUDITED) | |||||||
|
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||||||
| Selected Balance Sheet Data: | |||||||
| Cash and cash equivalents (includes restricted cash) | $ | 28.4 | $ | 26.1 | |||
| Net working capital (excludes cash and cash equivalents) | $ | 27.9 | $ | 35.9 | |||
| Goodwill | $ | 4.4 | $ | 4.4 | |||
| Total assets | $ | 165.2 | $ | 162.0 | |||
| Total debt | $ | 12.5 | $ | 11.1 | |||
| Total stockholders' equity | $ | 53.8 | $ | 60.6 | |||
| Liquidity: | |||||||
| Cash and cash equivalents plus borrowing availability | $ | 50.0 | $ | 42.2 | |||
| Three Months Ended December 31, | |||||||
| 2012 | 2011 | ||||||
| Cash provided (used) in operating activities | $ | 3.3 | $ | (9.0 | ) | ||
| Cash provided (used) in investing activities | $ | (0.4 | ) | $ | (0.3 | ) | |
| Cash provided (used) in financing activities | $ | (0.8 | ) | $ | (9.0 | ) | |
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| OPERATING SEGMENT STATEMENTS OF OPERATIONS | ||||||
| (DOLLARS IN MILLIONS) | ||||||
| (UNAUDITED) | ||||||
|
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| COMMUNICATIONS | ||||||
| Three Months Ended | ||||||
| December 31, | ||||||
| 2012 | 2011 | |||||
| Revenues | $ | 40.1 | $ | 25.2 | ||
| Cost of services | 32.9 | 21.6 | ||||
| Gross profit | 7.2 | 3.6 | ||||
| Selling, general and administrative expenses | 3.2 | 2.2 | ||||
| Corporate allocations | 0.3 | 0.5 | ||||
| Income (loss) from operations | $ | 3.7 | $ | 0.9 | ||
| Other data: | ||||||
| Depreciation & amortization expense | $ | 0.1 | $ | 0.1 | ||
| Total assets | $ | 34.1 | $ | 17.9 | ||
| RESIDENTIAL | ||||||
| Three Months Ended | ||||||
| December 31, | ||||||
| 2012 | 2011 | |||||
| Revenues | $ | 36.0 | $ | 29.3 | ||
| Cost of services | 29.9 | 24.6 | ||||
| Gross profit | 6.1 | 4.6 | ||||
| Selling, general and administrative expenses | 4.9 | 3.9 | ||||
| Corporate allocations | 0.3 | 0.5 | ||||
| Income (loss) from operations | $ | 0.9 | $ | 0.2 | ||
| Other data: | ||||||
| Depreciation & amortization expense | $ | 0.1 | $ | 0.1 | ||
| Total assets | $ | 31.9 | $ | 23.1 | ||
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| OPERATING SEGMENT STATEMENTS OF OPERATIONS | ||||||||
| (DOLLARS IN MILLIONS) | ||||||||
| (UNAUDITED) | ||||||||
| COMMERCIAL & INDUSTRIAL | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenues | $ | 51.1 | $ | 54.6 | ||||
| Cost of services | 46.5 | 49.6 | ||||||
| Gross profit | 4.6 | 5.0 | ||||||
| Selling, general and administrative expenses | 3.2 | 2.6 | ||||||
| Corporate allocations | 0.5 | 1.4 | ||||||
| Income (loss) from operations | $ | 0.9 | $ | 1.0 | ||||
| Other data: | ||||||||
| Depreciation & amortization expense | $ | 0.1 | $ | 0.1 | ||||
| Total assets | $ | 54.4 | $ | 73.4 | ||||
| CORPORATE | ||||||||
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenues | $ | - | $ | - | ||||
| Cost of services | - | - | ||||||
| Gross profit | - | - | ||||||
| Selling, general and administrative expenses | 3.6 | 3.8 | ||||||
| Corporate allocations | (1.2 | ) | (2.4 | ) | ||||
| Income (loss) from operations | (2.4 | ) | (1.5 | ) | ||||
| Interest and other expense, net | 2.3 | 0.5 | ||||||
| Provision (benefit) for income taxes | 0.1 | (0.0 | ) | |||||
| Net income (loss) from continuing operations | $ | (4.8 | ) | $ | (1.9 | ) | ||
| Other data: | ||||||||
| Depreciation & amortization expense | $ | 0.3 | $ | 0.3 | ||||
| Total assets | $ | 44.7 | $ | 47.6 | ||||
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DISCONTINUED OPERATIONS STATEMENT OF OPERATIONS |
||||||||
| (DOLLARS IN MILLIONS) | ||||||||
| (UNAUDITED) | ||||||||
| Three Months Ended December 31, | ||||||||
| 2012 | 2011 | |||||||
| Revenues | $ | 0.5 | $ | 6.3 | ||||
| Cost of services | 0.5 | 8.6 | ||||||
| Gross profit | 0.1 | (2.3 | ) | |||||
| Selling, general and administrative expenses | 0.2 | 0.7 | ||||||
| Loss (gain) on asset sales | - | 0.2 | ||||||
| Restructuring charges | 0.0 | 0.6 | ||||||
| Loss from discontinued operations | (0.1 | ) | (3.7 | ) | ||||
| Provision (benefit) for income taxes | (0.0 | ) | 0.2 | |||||
| Net loss from discontinued operations | $ | (0.1 | ) | $ | (3.9 | ) | ||
713-860-1500
or
phil.denning@icrinc.com
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